This topic will cover how to enter and submit Personal Use of Company Car.

What is Personal Use of Company Car

Personal Use of Company Car (also referred to as “PUCC or Auto Use/Auto Fringe”) is the financial benefit an employee received from using a company car; the value of that financial benefit needs to be added to the W-2 form and reported in box 14 each calendar year.

How is Personal Use of Company Car taxed and reported on the W-2

Personal Use of Company Car is taxable for the following per IRS regulations:

• FICA (SS/MED) - Taxable
• Federal Withholding – Taxable
• State Withholding – Taxable (PA Exempt)
• Local Withholding – Taxable (PA Exempt)
• Federal Unemployment - Taxable
• State Unemployment – Taxable
• Box 14 – Code: TAX AUTO

Who needs to report Personal Use of Company Car and what amounts should be recorded

Any employee that used a company car during the year should report the value of that financial benefit through payroll. The amount will be specific to each employee, your accountant should be able to advise on the amount that should be reported.

How do I add Personal Use of Company Car to an employee’s W-2

The Personal Use of Company Car (also referred to as Auto Use, Auto Fringe, PUCC) benefit amount needs to be recorded on a payroll check.

When should I process Personal Use of Company Car amounts

You can record the amounts:

• On the same check as standard wages for a scheduled pay date (recommended)
  Recording Personal Use of Company Car on the same check as standard wages for a scheduled pay date will allow you to enter the Personal Use of Company Car benefit amount as an additional line item on the same check as the employee’s regular wages. With this option, the Personal Use of Company Car amount will be combined with the regular wages for your standard pay period and the required taxes will be deducted from the employee’s regular wages. There are no additional processing fees associated with this option.
• On a separate check and separate unscheduled pay date.

How can I record Personal Use of Company Car benefit amount on the same check as standard wages for a scheduled pay date.

Since Personal Use of Company Car is entered for reporting and tax calculation purposes but excluded from the net pay or subtracted during the calculation to net pay, the applicable social security, medicare, federal, *state, and *local taxes that calculate on the Personal Use of Company Car will be deducted from the employee’s regular wages and will reduce their net pay accordingly. Social Security, Medicare, employee paid state unemployment and local tax withholding are required, but employees typically do not want the additional federal and state income tax withheld. In those instances, you will need to make note of the federal and state tax amounts that calculate prior to entering the Personal Use of Company Car. After you enter the Personal Use of Company Car, you’ll need to override the calculated tax amounts and adjust the totals back to the amounts you noted before entering the Personal Use of Company Car.

Personal Use of Company Car is exempt from PA state and PA local tax withholding.

Click here for detailed instructions.

1. Choose Actions > Enter Time.
2. In the Payroll schedule field, select the appropriate payroll schedule.
3. Enter the standard hours and payroll figures as you normally do each pay period.
4. In the Detail payroll View, for each employee that will have Personal Use of Company Car/Auto Use recorded, take note of the net pay amount and the federal and state tax amounts that calculate on just the regular wages. Do this before you enter the Auto Use amounts. Show me.
   

• Enter the Personal Use of Company Car amounts for the applicable employees. This will cause increases to the Social Security, Medicare, federal, *state and *local tax amounts, and any items that calculate as a percentage of wages (i.e. 401k). The net pay will be decreased accordingly. Show me.
  

  Note: Personal Use of Company Car is exempt from PA state and PA local tax withholding

• If the employee wants the additional tax amounts withheld on the check, skip to step 8 to preview the payroll.
• If the employee does NOT want the additional federal and state tax amounts withheld from their check, you will need to manually override the appropriate tax and deductions fields and reset the amounts to the totals you noted prior to entering the Personal Use of Company Car (step 4 above). Once the amounts are adjusted, the Personal Use of Company Car will only reduce the net pay by the additional required taxes (Social Security, Medicare, employee paid state unemployment tax and applicable local tax withholding). Show me.
  
• Click the Preview Payroll button to review payroll checks before submitting them to myPay Solutions for processing.
• Click the Submit Batch option once you are ready to submit the figures for processing.

Important notes

• Watch out for additional payroll items that are set to calculate as a percentage of wages such as retirement deductions, employer match amounts, etc. If those items should calculate exclusively on the regular wages (not on the Personal Use of Company Car amounts), you may need to manually adjust the calculated amounts. Note: When you override calculated amounts, be cautious of the annual limits and ensure your changes will not take employees over the set limits for the year.
• The taxes will calculate based on the total gross taxable wages (Regular Wages + taxable Personal Use of Company Car), your standard payroll period and the employee’s filing status/allowances. Please be sure to adjust the taxes if the employees do not want additional income tax amounts withheld for the Personal Use of Company Car. For employees with fixed amounts or fixed percentages set up for income tax withholding, the fixed rates will be applied.
• Please refer to the myPay Solutions Year-End Guide for current year-end submission deadlines.

How can I record Personal Use of Company Car on a separate check

Since Personal Use of Company Car is excluded from net pay but Social Security, Medicare, federal, state and local taxes calculate (exempt PA state and PA local), entering Personal Use of Company Car without wages will cause a negative check. Negative checks cannot be submitted or processed. To process Personal Use of Company Car on a separate check without additional wages, you will need to add wages to cover the required taxes (gross up) or the company will need cover the cost of the taxes for the employee. Please contact your Payroll Specialist if you need to process Personal Use of Company Car on a separate check without additional wages.

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